Question of the Day

Have you been impacted by the government shutdown?

The last two installments of The American Survey explored the disconnect between good economic news and poor perceptions among voters. Despite the U.S. economy’s continuing robust performance — revised first-quarter GDP numbers released June 29 show a 5.6 percent growth clip, the fastest in over two years — Americans remain in a sour mood. The previous articles analyzed the impact of hyper-partisanship (May 26) and new-economy angst (June 23) on this collective gloom. In the third part of this series we examine another factor, lifestyle inflation, and its contribution to the public’s negative views despite an objectively strong economy.

Lifestyle inflation is the pocketbook equivalent of a river reaching flood stage — creating creeping anxiety and even potential devastation. In a nutshell, it means Americans feel stressed because the number and amount of bills has swelled, while their ability to pay them feels skinnier. It’s scary and unsettling.

Evidence of lifestyle inflation is all around us. According to a June 19 Gallup report, “a majority of Americans believe that the amount they pay for gasoline, home utilities, food and groceries, local property taxes, out-of-pocket health care costs and drugs and health insurance has gone up over the past year.” The Gallup report also notes a majority say their take-home pay has either stayed the same or gone down and only a small number say they could increase the amount they save monthly. So, while the GDP looks strong and inflation seems under control, Americans feel a torrent of rising expenses.

Thinking about other trends in the past decade, the sheer number of bills consumers pay every month is also on the rise. Cable or satellite TV, cell phones, Internet access and car leases are just a few of the new consumer bills Americans pay monthly that didn’t even exist two decades ago.

Voters indeed perceive that Americans pay more bills today than they did a decade ago, according to the last American Survey (802 registered voters; May 30-June 3). As the first chart demonstrates, we asked whether most Americans receive more monthly bills, fewer monthly bills or the same number of monthly bills compared to 10 years ago. We found an overwhelming 83 percent believe Americans receive more monthly bills. And while this perception did not vary a great deal by gender or party affiliation, as the second chart shows, those under 55 years of age most acutely feel the effects of lifestyle inflation, with 87 percent saying they pay more bills compared to a decade ago.

Taken together, hyper-partisanship, new-economy angst and lifestyle inflation all contribute to voters discounting the benefits of a steady stream of robust economic news over the past several years. The combined impact of these factors helps explain why public perceptions and economic statistics seem out of whack, and why successful political communication should replace GDP gibberish with a new form of “pocketbook pragmatism” — which will be the topic of the final installment of this series.